Post-Tsunami Recovery: Issues and Challenges in Sri Lanka

Abstract

The tsunami of December 26 2004 left Sri Lanka with over 30,000 people dead, several hundred thousand displaced, and massive damage to infrastructure and capital assets (estimated at around US$ 1 billion (4.5 per cent of GDP)) particularly in tourism and fisheries sectors. The medium-term financing needs were estimated to be around US$ 1.5-1.6 billion (7.5 per cent of GDP). It is expected to reduce 2005 GDP by around 0.5 - 1.0%. With no previous history of such disasters Sri Lanka was quite unprepared for the tsunami. But with a massive community response followed by government and international action, it was able to implement an initial relief effort that, in the circumstances can be termed a success Promised external assistance - a total of US$ 2.2 billion over the next 2-3 years - appeared to be more than adequate to cover reconstruction costs in full. But problems have emerged with relief payments, providing credit facilities, distribution of funds, coordination of reconstruction activities, and mismanagement of funds. Clearly the reconstruction phase poses complex and difficult challenges. Housing is the households’ main concern. Reconstruction and repairs have been hampered by the ‘no-build’ coastal buffer zone, cuts to relief payments and cost increases. Progress has been slow, uneven, and concentrated in the south and southeast, though the worst affected areas are in the east and northeast